The economy is a shambles. True, from the perspective of the poor, it was also a shambles before the current crisis, but things are now so discombobulated that even stratospheric penthouses are leaking cash. Collapse beckons. Urgency dictates policy. Contending constituencies will request, demand, and even battle for changes. Policies will ensue. The question is not will they happen, but will they be good or bad?
One approach to deciding is to look at each proposal entirely on its own but it turns out that examining proposals and actions this way tends to push us into a narrow frame of thinking that assesses merit on very narrow terms defined by the proposers of proposals themselves, which is often elites at the top of society. More, this case by case approach focuses on what on aspects highlighted in general discussions, in turn dictated by media, in turn owned by the proposals proposers. To the forefront gallops the goal of getting the economy "back in shape." Avoid meltdown. Good is reducing or preventing economic travail while getting the economy back to an even keel. Bad is not doing enough to reduce or even better prevent economic travail, while getting the economy back to an even keel. Worse, economic travail is defined by diverse pundits to mean continued decline of profit making prospects. And "an even keel"? What does that mean? Well, that is the real problem, because what the media call an "even keel" is really a lopsided mess that imposes a constant calamity on those who don’t inhabit penthouses, and getting back to that isn’t really all that much of a gain.
So here is a different approach to assessing proposals that can help us situate our thoughts when we look at details. This approach recognizes there will be diverse policies, actions, reforms. It also recognizes that these policies will all seek to forestall further dissolution. What is controversial is not avoiding collapse, but where we wind up after having avoided total collapse. So that’s what this approach highlights: When we get back into a working groove, just exactly what kind of groove are we in?
From this question arises a worthy and instructive basis for judgements. Will a proposal for change foster a new balance of power among contending classes as bad or even worse for the poor than it was before the current crisis? If so, that is bad. Or will a proposal for change foster a new balance of power among contending classes that has shifted on behalf of those on the bottom? If so, that is good.
This norm is not asking whose hands handouts wind up in. This norm is asking whose bargaining power has climbed, and whose has fallen? It highlights continued outcomes, not momentary conditions.
If banks and rich individuals were to receive gargantuan government payoffs – which, by the way, is the usual order of events all the time in any event – and that would forestall collapse but also enhance bargaining power for those at the bottom while reducing bargaining power for owners and professionals, very good. If this were the case, that such transfers looked obscene at the moment would not matter near so much as their longer term implication. Likewise, if dispersal of funds or other benefits to those who are economically poor and weak would reduce their long term bargaining power, then, no, that would not be good, despite looking and feeling good, in the moment.
Of course, in actual fact, it is most often true that handouts strengthen their recipients so the above dangers aren’t too realistic, case by case, but the possible if unlikely picture I offered does make the point that what really matters is longer term social relations.
I don’t want to prattle on excessively. Once noted, the point is pretty obvious. Assessing any particular bailout or other stimulus or redistributive or investment proposal is largely contextual, case by case, of course, even as I am trying to provide general norms broadly applicable to every situation. But I would like to offer one large scale example that operates all the time, not just in moments deemed by elites to be crises, to make the general point I am offering more tangible.
Why do owners and other economic and political elites tend to favor government spending in military realms over government spending on low income housing, schools for poor neighborhoods, public health care, and general infrastructure? Many answers are given, such as that military expenditures generate jobs, military expenditures benefit big companies which must benefit for the economy’s sake, military expenditures are pushed through by military lobbies, and military expenditures are effective in that they actually generate military gains. Indeed, these explanations are repeated so often that we tend to accept them despite the fact that even a few moments thought reveals they are nonsense.
Thus: Military and other high tech expenditures generate fewer jobs per buck than any of the others mentioned – infrastructure, housing, health, green rebuilding, etc. This reason works opposite to what is suggested. The big companies could as easily be building the new schools, housing, etc., as building air bases and missiles, thus they profit either way. This reason is neutral. That there are more powerful lobbies for one type policy than the other doesn’t answer the question – it is the question we are trying to answer. This reason just restates the question, why is there more elite pressure (now noted to be lobbies) one way than the other? And finally, much military expenditure generates nothing but useless stuff buried forever, and this is highly welcome to elites, please note, which is why it persists – though some military spending does indeed deliver actual means of destruction, much sought after – so at least this reason has some weight, however despicable that weight is.
That’s the kind of analysis one could conceivably produce from examining the proposed policy, military spending, in its own terms – on an analyst’s very good day. On an analyst’s bad day, however, as warned, what would more likely arise would be a procurement by procurement assessment of technological capacity of the proposed expenditures to exterminate enemies, or of the number of workers it would entail, or the profits it would produce, etc., without comparative insight.
Now suppose the analyst starts, instead, with the balance of power mindset proposed above. She then immediately asks, what are the implication of the two opposed paths of government spending – military and social – on the balance of power among contending classes? Whoops, to ask the question is to answer it. The military spending certainly keeps economic wheels turning and profits flowing, while it provides some additional means to protect profitability should anyone challenge it, and notably does nothing to enhance the power of those below. In contrast, the social spending would also keep economic wheels turning and profits flowing, but would not only not provide additional means to protect profitability should anyone challenge it, it would enhance the life situations of working people. Social spending would inoculate them against threats of unemployment. It would enrich their learning and confidence. It would advance their health and otherwise empower them. In short, it could easily somewhat shift the balance of power to the advantage of those below and thus propel a long term transfer of wealth and power downward.
In but a few moments thought, guiding by a useful norm of evaluation, we arrive at the reason for so much military spending. Elites, still having sufficient power to get their way, like military spending more than they like social spending. And it isn’t that the elites are sadistic. If the poor and downtrodden could be aided a bit without impacting the balance of power, that’s no problem…in fact they think charity is nice and they sometimes even splurge on it. But elite don’t give charity and certainly don’t want the government to set a precedent of undertaking policy in ways that have negative long term effects on elite profit and power. So the reason we get military spending instead of social spending, in large degree, isn’t because military spending has highly desired positive effects. Instead, it is, quite amazingly, because the life affirming, justice producing, implications of social spending are hated and rejected by those seeking to preserve their already incredibly bloated power and standing. It isn’t, in other words, that they like tanks and bombers. It is that they dislike inner city health care and schooling.
This dynamic, once we see it, strikes us as being obviously at play all the time. It doesn’t disappear when things are threatening even penthouse luxury. The broad criteria of those at the top for what is good or bad policy doesn’t change. They don’t do class war on the poor sometimes – they do it all the time – and they do it not because they are personally sadistic, but because they are always out to protect and defend themselves, which, they tell themselves is the same as protecting and defending life, love, dignity, truth, justice, and everything else worthy and good…in what has to be history’s most vulgar and long running rationalization.
So – and this is the bottom line – in considering what to advocate, or support, or oppose, among proposed economic actions in our current moment, or in any other moment, look first at the balance of power among contending constituencies. First consider classes first (this is, after all, the economy we are talking about), but then also certainly consider cultural communities, gender groups, age groups, and even regional communities, or, or, if you care, even sectors of corporate elites. The economy is going to be brought back to what the pundits will call an "even keel" or "business as usual." What matters in this journey is shifts in bargaining power. And the reason such shifts matter is when the economy is upright and working, it is still a despicably vile but efficient machine for profiting the powerful while subverting the hopes, dreams, dignity, and potential of the weak. Improved bargaining power for those below diminishes the injustice – hopefully, and may even start us on the road to a new system – that really does have an even keel.